$65 Billion Saved In California Alone With Energy Efficiency

A new bipartisan report citing energy efficiency’s continuing and huge potential as a major U.S. resource underscores once again that saving energy need not be a political issue, which Californians well know after enjoying enormous economic and environmental benefits thanks to both Democratic and Republican leadership.

Efficiency efforts since the 1970s have saved Californians over $65 billion, helped make household electricity bills 25 percent below the national average, and avoided at least 30 power plants – these savings are now preventing annual climate-warming carbon pollution equivalent to emissions from 5 million cars.

Coming on the heels of the formation of a bipartisan energy efficiency caucus in the U.S. House and strong progress advancing efficiency in both “red” and “blue” states, it’s clear efficiency is a winning approach to meet our nation’s energy needs.

California is a great example of the benefits of bipartisan support for energy efficiency, with the first push for efficiency standards coming under then-Governor Ronald Reagan. Since then, GOP governors including Arnold Schwarzenegger and Pete Wilson, as well as Democratic governors like Jerry Brown, have sustained and expanded California’s efforts.

Although some of this can be explained by factors that are independent of energy policy, much of California’s progress is due to energy saving policies. Some skeptics claim the difference could be due to decline in industry, but that was the case for the entire country not just California. Also, only 20 percent of the difference between California’s per capita electricity consumption and the rest of the nation is due to industrial sector loads (and California has a long history of industrial efficiency programs that help explain that gap). My colleague Sierra Martinez will explore this subject in more detail shortly.

Meanwhile, California’s success with efficiency is also evident in the state’s ability to reduce per capita household energy use, far outstripping every other state.

Number of 10-year Periods with Declining Weather-adjusted Per Capita Residential Energy Consumption (1985-2010)

Since the 1970s, energy efficiency has saved Californians $65 billion. It also has helped reduce electric bills for California families, which are now 25 percent below the national average (and the 9th lowest in the nation), saving nearly $700 annually compared to the average Texas household, for example.

Opponents of clean energy often decry California’s relatively high per kilowatt-hour rates, but families actually care more about the size of the check they write to their utility every month. Compared to the national average, the other most populous states and its neighbors, Californians win hands-down on those bills.

Comparison of Residential Electric Bills and Rates

Source: U.S. Energy Information Administration

Lower utility bills have also improved California’s economic productivity. Since 1980, California has improved its bang for each buck of electricity use more than twice as fast as the rest of the nation. As a result, California now creates twice as much Gross Domestic Product for every kilowatt-hour of electricity consumed compared to the rest of the country.

Environmental Benefits

The California Energy Commission estimates that California’s decades of progress on energy efficiency programs and standards have saved about 15,000 megawatts of electricity, avoiding the need for about 30 large power plants (equivalent to 30Rosenfelds). As a result, efficiency is now the second-largest resource meeting California’s electric needs.

Each year, energy savings are also avoiding more than 20 million metric tons of carbon dioxide – the primary global-warming pollutant – equivalent to the pollution from nearly 5 million cars.

Helping Low-Income Families

California’s efficiency efforts have helped make everyone’s utility bills more affordable. In addition, targeted programs help lower-income households improve efficiency and reduce their energy bills by providing free energy efficiency upgrades, such as weatherization and efficient refrigerators, as well as bill payment assistance. These programs helped more than 1 million households upgrade their efficiency from 2009 through 2011.

A Growing Success

California has achieved these efficiency benefits thanks to integrated policies that can be easily adopted elsewhere: advancing research and development of new efficiency technologies; utility programs that help consumers use efficient technologies and processes to lower their bills; and minimum efficiency standards to ensure new buildings and appliances are not energy “guzzlers.”

Even with California’s tremendous progress, enormous opportunities remain to save energy more cheaply than it can be produced. Studies have identified additional cost-effective savings over the coming decade that could avoid more than 10 additional power plants, which could save utility customers billions of dollars more and help us reduce carbon emissions to 1990 levels as required by the AB 32 “Global Warming Solutions Act.”

Achieving economic growth and environmental improvements by using energy more productively is a goal that can – and should – be embraced by all political persuasions.

NRDC is the nation's most effective environmental action group, combining the grassroots power of 1.3 million members and online activists with the courtroom clout and expertise of more than 350 lawyers, scientists and other professionals.